North America Today 2Constellium-UACJ ABS LLCFeature - North America Today 2

Constellium-UACJ ABS LLCFirst Hot-rolled Coil Targeted for
Supplying Automobile Manufacturers
Comes off New Production Line

Profile

Dave Davis
Plant Manager, Constellium-UACJ ABS LLC

Dave Davis, a mechanical engineer, was hired by Logan Aluminum in 1984, where he worked for 12 years in a variety of capacities, including process and team leader positions. He left the company for a period of time and then returned in 2002 and worked for another 12 years. In 2014, he was hired the position of plant manager at Constellium-UACJ ABS.

Plant Launch and Strengths of the Company

Constellium-UACJ ABS LCC was established as a joint venture between UACJ, Japan’s largest aluminum manufacturer, and Constellium N.V., a European company, in response to rapidly growing demand for elemental aluminum materials. The company has completed construction of a new plant equipped with a state-of-the-art surface treatment line, and the production of materials for Japanese, European and US automobile manufacturers has begun.

The first hot-rolled coil came off of the production line early April 1, 2016, marking the beginning of operations for the 100,000 tons facility. “This first coil was certainly a milestone for us, and we are hoping to create profits early on,” stated Dave Davis, plant manager of Constellium-UACJ ABS. He continued, “We are also continuing to complete commissioning of the facility and seeking qualification. Our people are our strength. You can buy equipment anywhere, but the thing that makes you different from everybody else is the people you hire, the human factor. And what we committed ourselves to do is making sure we hire the right people, those who don’t need to be managed. They have to lead.

Growth Drivers and Future Direction

The introduction of stricter fuel efficiency regulations requires all automobile manufacturers to achieve a fixed standard of improvement by 2020. The resonating impact in the automotive industry has led to various opportunities in the market. One such example is, in order to produce lighter vehicles, manufacturers are rapidly changing to aluminum automotive body sheet. Currently, the demand for automotive aluminum sheet materials is expected to spike sharply from around 700,000 tons in 2016 to large-scale use of 1.0-1.2 million tons in 2020.

Automobile manufacturers are customers with high potential. “We’ve talked to representatives of automobile manufacturers in the U.S. about specific models and what exactly we can deliver that they need,” Davis explained. “There’s a lot of business out there. They talk openly about what they would like for us to do, and that is invaluable in moving forward. We’d like to start discussing partnering with Japanese automobile manufacturers as well.”

Investment Plans to Match Future Market Growth – Contemplating the Addition of Second and Third Lines

Bill Pfund CFO Constellium-UACJ ABS LLC

Bill Pfund, CFO of Constellium-UACJ ABS LLC, is very bullish on business potential, commenting, “The possibilities for business in the future are looking up. Considering factors such as the Corporate Average Fuel Efficiency (CAFE) standards and requirements down the road, it’s anticipated that the North American automobile aluminum materials market will grow from its current level of approximately 700,000 tons per annum to 1-1.2 million tons in 2020. That is an incredibly attractive market.

To meet that phenomenal demand, the company currently has a committee investigating the addition of more lines. We are looking at capital cost, personnel cost and possible synergies. Looking down the road, we’ll watch the trend of using aluminum materials for automobiles in the U.S. market and investigate planning for investment from a positive perspective.”